When you find the right home, or know what you’re looking to spend, you’ll need to find a mortgage lender.  But before you can get approved for a loan, you have to find the home you want to buy so that you can find out if you’ll be approved for enough to cover the cost of the home.

Sounds like a double edged sword huh?  Don’t worry, it’s actually pretty easy because you can have a lender provide you with a Good Faith Estimate (GFE) as long as you have a reasonable idea of what you are willing on a house or property at a maximum.  It is a fairly painless and quick process.  Having a Good Faith Estimate or GFE also lets sellers know you’re serious and will have the capital to purchase the property.  This is especially important in competitive markets.

The Process of Getting a GFE is:

1. Get prequalified thru lender
2. Shop for and find house
3. Submit contract (k) for sale
4. K gets approved
5. Fill out loan app (1003)
6. Lender approves 1003
7. Lender has 3 days after approval to issue to borrower GFE
8. Covers estimated closing and most importantly estimated monthly payment

But what happens if you don’t get approved for the amount you need, or the loan estimate doesn’t seem fair, you don’t have to worry.  You are able to get multiple GFEs from multiple lenders.

What is a GFE and What Does it Look Like?

A good faith estimate is a form that includes all of the fees, payments, and financial information that you will be provided with by a lender. As stated above, you are not limited to only one good faith estimate.  You can acquire a good faith estimate from numerous lenders and banks so that you can shop for a loan that helps you buy the property you want and meets your specific needs.

Which Fees Are Covered and Not Covered by a GFE

One common question is if a good faith estimate covers closing costs.  Yes, your good faith estimate is inclusive of closing costs, the loan, the terms of the loan and almost all other finances for buying a home and using a lender.  Some of the fees may be an estimate if you do not already have the property picked out, but if you do, it should be close to accurate.

However, title insurance, additional inspections, and other miscellaneous items may not be included.  You’ll want to talk to your real estate agent, or the closing and settlement agent to find out if there will be any additional fees that may not be covered by the lender or in the GFE.  This is because you can choose who your title, closing and escrow companies are.  By being able to choose you can potentially save money, and because you may not have one picked out when getting the GFE, the lender will only be able to estimate based on industry averages.

In some cases, and depending on how you negotiate when shopping, the seller of the house may be willing to pick up some of the costs outlined in the GFE, but that will depend on how quickly they want to sell, and also on your specific situation.

Where Can You Download a Sample GFE Form?

As mentioned above, the GFE is a form you are provided with.  You can find a sample, and also download a good faith estimate form on the HUD website by clicking here.  The good news is you do not have to fill this out yourself.  It is handled by the lender.

A good faith estimate is not as scary as it may look when you first see it.  Your real estate agent and closing company look at these regularly and should be able to assist you with any questions or concerns you have with the good faith estimate form.  If you don’t feel comfortable asking them, we’re also able to assist.  Contact us at info@atgtitle.com and one of our professional closing agents will be happy to alleviate any worries you have, and walk you through how we can help you with a hassle-free closing.

One of the most common concerns people that do not buy title insurance policies have after they have purchased their new home is, “what happens if?”.

What if the person who sold it to me owed money and there is a lien on the house that wasn’t detected?  What if they bought the home from a previous owner who had a child out of wedlock, and that child was an unknown heir and decides to make a claim?  There are a ton of concerns that can make you regret not buying a title insurance policy before you close on the home.  That leads us to one of the most common questions.

Can You Buy Title Insurance After Closing?

Yes, you can buy a title insurance policy after you have already closed on your new home, and you can still purchase a policy after all of the paperwork has been completed.  But waiting until after you close is not always a good option.

If you wait until after the closing of the house is complete, any issues arise after the closing, and before you buy the title insurance policy may not be covered.  That in between time frame is a lot of the risk you take on.

That’s why you’ll be encouraged to purchase a policy before leaving the closing appointment.  Having the policy before closing isn’t just for you to have a peace-of-mind, it is to help protect you for that in between period where you weren’t sure if you wanted a title insurance policy or not.  Here are a few examples of where buying a policy before closing, instead of after, gives you the protection for those “what if” questions.

Suppose the title company checked public records like they are supposed to, and everything was clean.  The closing appointment takes place and the deal is done.  A few months or a couple years later it turns out that someone filed a few papers wrong and went back into the files to correct the issue.  Now there is room for a problem which was previously undetectable and the title can be challenged.  Because this filing error happened after the closing, and before you purchased a policy, you may not be covered.

Another situation is if a previous owner (it doesn’t have to be the person you bought the house from) owed a contractor some money.  It could have been for repairing the foundation, fixing a wall or anything.  The accounting team discovers there is money owed and places a lien on your home.  Because this was something the title company could not detect, and you did not buy a policy before they cleared the deed, your new title insurance policy which was purchased after your closing may not protect you.

In answer to your question, yes can you buy title insurance after closing.  But it is not recommended because you’re leaving yourself a gap where if something arises, you may not be protected.  By purchasing a policy before you close, you can reduce this risk and enjoy your new home with a peace-of-mind and help prevent those “what if” thoughts that can cause stress and worry.

When buying a home or new property, you’ll be working with both a title company and a settlement agent.  Both sound similar, or that there isn’t much of a difference between their responsibilities when it comes to a title company vs a settlement agent, but both of them have very different responsibilities during the house buying process.

The title company is responsible for finding issues that could arise when transferring the title (proof of ownership) of the house or property you are buying.  A settlement agent’s job is to do the actual paperwork for transferring the ownership of the land.  Depending on the area and state you live in, the Settlement Agent may or may not also have to be a licensed attorney or lawyer.

Now here’s where it could get confusing when comparing a title company vs a settlement agent.

The settlement agent may work for the title company, and the title company may also handle your escrow and closing services.  But this isn’t always the case.

You as the home or property buyer have the right to choose your own title company, and to choose your own settlement agent.  They do not have to be from the same organization.  If you do choose to hire your own title company or settlement agent, you can save money by shopping around.  But there are risks involved with doing this.

Not all title companies and settlement agents provide the same level of dependability and service.  It is also not recommended to choose a settlement agent outside of the title company as it adds more people to the mix.  It also places two separate groups of people together that may not be familiar with all of the processes from each other’s companies or operations. By choosing a settlement agent that works for the the same title company you are using, it can help to make the closing quicker and easier.

One reason for this is if the Settlement Agent forgets a document.  Because the settlement agent and title company are already at their office, and it is the same company with the same system, they should be able to access the missing document and print a new version on the spot.  That is why your real estate agent may recommend one that is more expensive.  It will be a settlement agent and title company that they have a previous relationship with and trust, or they’ll have two selected that can work together seamlessly.  Dependability and reliability are both important if you want a hassle-free closing.

In short, the title company has the job of making sure that the seller is the rightful owner of the property, and the buyer will have what appears to be a clean title and the right to own it.  Once this is done, the settlement agent will complete all the necessary paperwork to make sure that you become the rightful owner of the property.

If you have any other questions about the differences between a title company vs. a settlement agent, email us at info@atgtitle.com or call us using the number at the top of the screen.  And of course we’ll be happy to give you a quote for title insurance and assist with your title, escrow and closing needs.

When you’re closing on a home you’re already expecting mountains of paperwork, confusing contracts that will be presented in legal jargon, and a lot of people asking you to sign things. Some of these people may have titles and work for companies you have never heard of, and that is where closings can get a bit nerve wracking.

The good news is you’ll have people at your closing who are there to explain what each document is, and why it is important.  What may not be clear are the people who have similar job titles, why they work at different companies, and why you need all of them.  One example of this is the underwriters.

You’ll be hearing about the “underwriter” multiple times, but you’ll see different peoples’ names next to the job title.  That’s because there are two people involved.  One will be underwriting your title insurance policy, and the other will be underwriting your loan from a bank or financial institution.  Both work closely with the title company, but they do very different things.

The two types of underwriters you’ll hear about when closing are:

• The financial underwriter – this is the person who will authorize or decline your ability to take out and get approved for a loan. They review the risk the financial institution will take on by lending you money.
• The title underwriter – this underwriter will examine the title and check for possible issues that could arise during and after you get the title for the house, building or property. If they feel the title will clear and you can take control, they’ll be able to approve you for a title insurance policy.

Both of the underwriters work independently of each other, but each play a vital role in a real estate transaction.

First you’ll be hearing from the financial underwriter.  They’ll be looking into your credit history, how much you have in the bank, and all the things which impact you financially from car loans to student debt, and even your employment status.

Once cleared, and you have negotiated on a price to buy a property or home, you’ll select a title, escrow and closing company.  Many times, the title company will be able to handle the escrow and closing as well.  If you opt in to buying a title insurance policy, this is when you’ll come into contact with the title insurance underwriter.

Their job is to look at the total risk in writing a title insurance policy to help protect you in case someone lays claim to your home after you close.  But it is also important to remember that they work for the title insurance company, not for you.

Their job is to protect the title company, by also making sure the title you are going to receive is as clean as possible.  If you don’t have any issues arise, the title company is safe too.  Because of this, if they are open to writing a policy, it can be an extra peace-of-mind that there is less of a risk for someone making a claim on your home.

Although both of the underwriters will be thrown around synonymously, they both play an important, but different role.  If you have any questions about the underwriters and your closing, one of our trained staffed members will be happy to assist you.  Simply call us at the number on the top of the page, or email us at info@atgtitle.com.

Title insurance costs are calculated by multiplying the purchase price of your home by the rate per thousand your insurance company uses. The rate per thousand is a going rate that is used for every thousand dollars that is calculated for the value of your home.

A quick example: if the rate is 0.6% for every thousand, and you bought a $300,000 the title insurance costs would be $1,800.

Other companies, though, may use a bracket-style to calculate their premiers. For example, the percentage per thousand will differ for homes up to $100,000 vs homes with a value of $100,001 to $1,000,000.  Other factors will also affect the overall costs, including billed hours towards conducting a title search, examination, and addressing any title defects.

You may be wondering why title insurance costs seem so expensive at the close of sale. Title insurance costs are incorporated into the closing costs of a home and represent a one-time purchase. For this reason, title insurance costs do not fluctuate and can seem expensive to buyers who have just made a very expensive purchase on top of that.

Here are a few examples of situations where title insurance premiums may differ.

Example 1: High-value home purchase

Remember this simple factor: the higher the value of the home, the higher the title insurance cost. Higher value homes will generally be more expensive to insure, whether against title or property.

Home value is generally calculated by using a number of factors, including:

• Comparative market value of the home
• Demand in the market
• Current condition

If you’re purchasing a home with higher value, expect to pay more in title insurance costs.

Example 2: Refinancing a condo and how it’s calculated

Buyers are required by their lender to purchase a new policy when refinancing a condo or property. Typically, your Title Company will offer a discount from the original policy, 20-40% off policy depending on jurisdiction,  for a condominium, which is based on the value of the condo as well as the rate per thousand of your insurance company. Talk to your lender and or title company about how much a new policy will cost for your title insurance.

No, title insurance is not transferable because it serves as a lifetime guarantee to a legal title, unless that title changes. Since you paid in full for the title insurance during closing costs, it remains yours and is not transferable – not to your spouse, significant other or whomever.

If you’re frustrated and upset about this news, it’s important to remember what it is and why it is set up so that title insurance policies cannot be transferred.

Title insurance is a one time purchase that protects your ownership over a property from past liens and new claims.  That is why it can also only be purchased during the closing meeting of a home transfer from a title insurance company.

Can I Add My Spouse to an Existing Policy?

Yes, you can add a spouse or a dependent onto an existing title insurance policy. If you add a spouse or an heir onto an existing policy, the policy will not change and your property will remain covered.

Along the same lines, you and your heirs will always be protected from everything listed under that policy — even if you do not inhabit the property at a later point. Also, removing someone from a policy will not affect your coverage at all.

Will My Heirs or Dependents Inherent My Title Insurance Policy?

Title insurance can be inherited along with a property, but it cannot be gifted. If the owner of the property dies, the title insurance will continue as is for any heirs or legal beneficiaries of the property. But title insurance is not automatically transferred with a title if gifted or sold to a family member.

This means the title policy only terminates once the legal title transfers to a new owner.

In What Situations Will I Require New Title Insurance?

One of the only few instances title insurance may need to be tweaked is if you place a quitclaim on a residence for an LLC you do not fully own. In that case, the policy may need to be updated or a new one purchased.

In most cases, title insurance remains pretty inflexible to provide maximum protection under the law against any claims associated with the property.

Real estate agents are masters of home marketing, and they know exactly what buyers are looking for.  This includes knowing how to describe your home to make it stand out, getting the right angles in photographs to detail the property for a new owner and which features to focus on based on other properties that are selling or have sold in the area.  It’s important to remember that they only get paid when your home sells which is why your agent’s skills are so fine-tuned. They are masters at moving houses.

Aside from the points mentioned just now, here’s why your real estate agent deserves their commission and what you get in return for paying it.

The first thing they do is get your house in front of other agents.  Their network of peers has buyers looking for properties and this is something you do not have when you try to sell without an agent.  But that is only the beginning.

Next, your agent will list it on the MLS which is a private database for licensed professionals looking to buy or that are searching for properties for clients who are ready to buy.  Real estate agents also uses their own money for advertising and promotion and probably have deals with your local publications that home buyers use regularly. If you try to sell your home without an agent, you pay close to sticker price and the listing may not be as targeted or have preferred placement.

Because they do this for a living, their expertise in targeting the exact people who will be interested in your home is second nature to them. The commission is not only for the ads that run, it is for the years of experience they build finding buyers for homes and that is something only a trained professional can do.

They may also have contacts at real estate magazines, home buying sites and other marketing services that would take you countless hours to research, evaluate and find someone who will give you a fair price for listing your home.  The next benefit that only an industry professional can bring is his or her relationships.

From photographers to power-washing companies, contractors and stagers, even which title companies that can close your deal fast, your agent knows exactly who to contact for your old-home and who you can depend on to show up on time.  Because of the relationship and constant flow of business, there is quite possibly an industry or repeat business agreement lowering the price compared to what you would pay for a one time appointment.  In fact, negotiation is an area where your agent really shines.

They’re not emotionally invested in your soon-to-be ex-home, and going back and forth with a buyer’s agent isn’t as frustrating for them. They negotiate home sales regularly and know subtle tricks to make your position stronger.

For example, they might not put your offer of a home warranty in the listing, holding it back as a bargaining chip. Part of the commission you pay a real estate agent is to utilize their past experience in watching deals get put together that can close, and to come up with options and trade-offs you might not think of because you are not part of the industry. One of the biggest value adds that a real estate agent commission covers are the hidden traps to watch out for.  These can save you thousands of dollars by preventing you from making a mistake before signing the counteroffer.

The largest benefit to using an agent to sell your home, and why real estate agent commissions are high is that you do not have to disrupt your daily life.   Their job is to move the property and if it doesn’t sell, they don’t get paid.  That means you don’t have to take off work to show your house, you don’t have to miss an important event or even watching your kids play in a big game because an agent is calling about the listing or wants to see it.  The agent is there to show your home for you and work on sorting out everything from bringing foot traffic in to showing it only to solid perspective buyers.

The next time you wonder if getting a real estate agent is worth the commission you’re paying, and why you’re paying so much, think about all of the time they spend promoting your home, answering inquiries, and showing it to prospects so you can relax and keep living your life. The commission you pay your real estate agent covers all of this and in almost all cases, ends up being a great deal.

There’s no doubting it – title insurance rates are confusing. They’re baffling because most people immediately compare it to car or health insurance. But title insurance (both owner’s and lender’s) are nothing like a traditional insurance package that fluctuates in price, cost and coverage. That is where the confusion sets in.

If you’re asking yourself “Do title insurance rates increase over the time of a mortgage?“

The answer is no. Title insurance is paid in full with your closing costs if you choose to buy it.  The policy remains yours until you transfer the title or sell the property. Although it’s a one-time cost, the value of the title insurance does increase as property value increases, so it’s like an added win for you.  The longer you have the policy, the more it covers you for, and you never pay another penny on the policy.

Important thing to note: Only enhanced title insurance value increases with the increased value of the home up to 20% on average.

It is also important to know that there are two major types: owner’s and lender’s policies. The owner’s policy is issued for the purchase price of the property and contains all the basic coverages. The lender’s policy covers the amount of the loan.  But these are different than automobile or health insurance.

Auto, health and even care insurance policies are typically paid in monthly installments as you use or own the item that is insured.  The item can go up and down in value or become higher or lower risk.  That is the reason why they fluctuate and change.  Title insurance is a one time fee which is why it looks expensive when you see the price at your closing appointment, but title insurance rates do not change because you have already paid in full.

Title insurance is an added expense when purchasing real estate, and it’s an absolute must. Why? It protects you from any loss  (claims or legal fees) that arise from issues connected to the title to your property, such as:

• Unpaid real-estate taxes
• Unpaid mortgages
• Other liens against the property that are unresolved, including foreclosure that give creditors the right to foreclose on the property
• A forged signature in the past to transfer title from one property owner to another
• Transferor did not own the property to begin with
• Gaps in prior title ownership like a deceased owner whose estate has not been finalized and may have heirs with legal rights to the property.

You may now be asking yourself “What if my property value goes up?“ or “Does the title insurance policy still cover it, or does my rate increase?“.

This is worth reiterating because it’s another frequently asked questions. The answer is no, your rate will not go up. You pay a one-time fee for your title insurance at closing, and regardless of how much value your property gains, the title insurance policy will remain the same. The insurance coverage on “Enhanced Policy” goes up with inflation up to 20% in most states. But the premium paid at closing doesn’t change.